11 Management Hu, R.; Lin, M.; Shieh, C-J
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Performance evaluation of basic-level farmers’ associations introducing customer relationship 411 management Hu, R.; Lin, M.; Shieh, C-J. Performance evaluation of basic-level farmers’ associations introducing customer relationship management Reception of originals: 01/04/2018 Release for publication: 06/02/2018 Ridong Hu PhD in Engineering Institute : Institute of Quantitative Economics, Huaqiao University Address: No.668 Jimei Avenue, Xiamen, 361021 Fujian, China E-mail: [email protected] Mingyu Lin Institute :School of Economics and Finance, Huaqiao University Address: No. 269 Chenghua North Rd. Quanzhou, 362021 Fujian, China Chich-Jen Shieh PhD in Economics Institute :Institute of Quantitative Economics, Huaqiao University Address: No.668 Jimei Avenue, Xiamen, 361021 Fujian, China E-mail: charleshieh@ hqu.edu.cn (Corresponding author) Abstract Supply and marketing businesses have been the important economic business of basic-level farmers’ associations. However, following the changes of societies and markets, current basic- level farmers’ associationsare facing strict challenges and operation transformation on the supply and marketing businesses. It is necessary to introduce new business management models into the operation so as to enhance the overall business performance. The operation of supply and marketing businesses therefore should be established based on good customer relationship by better understanding customer needs, analyzing the need information, providing appropriate services and products, and actively concerning about customers’ after- sale responses to adjust and improve farmers’ associations’ services and products. To combine expert opinions, reduce input costs, and avoid fuzziness in the interview process, Modified Delphi Method is utilized for screening input and output factors. Basic-level farmers’ associations in Yunlin County, which is named the agricultural capital, is studied. The research results are summarized as followings. One DMU in the basic-level farmers’ associations shows strong efficiency, revealing the better relative efficiency. Three DMUs, with marginal inefficiency, present the relative efficiency between 0.9 and 1, revealing the relative efficiency being easily enhanced. Six DMUs, with obvious inefficiency, appear the efficiency lower than 0.9. The DEA evaluation results reveal that many basic-level farmers’ associations in Yunlin County do not achieve the scale efficiency. In this case, the input for basic-level Farmers’ associations’ introduction of customer relationship management, in Yunlin County, should be re-considered and re-adjusted in order to enhance the competitiveness. Finally, suggestions based on the results are proposed, expecting to analyze farmers’ relevant information and understand current situations and dilemmas of local agriculture production and marketing by the introduction of customer relationship management to provide farmers’ associations with opportunities and directions for future Custos e @gronegócio on line - v. 14, n. 2, Apr/Jun. - 2018. ISSN 1808-2882 www.custoseagronegocioonline.com.br Performance evaluation of basic-level farmers’ associations introducing customer relationship 412 management Hu, R.; Lin, M.; Shieh, C-J. transformation. Keywords: Farmers’ Association. Customer relationship management. Performance evaluation. 1. Introduction The structure of farmers’ associations in Taiwan is divided into economic business and expenditure business. Economic business is the major source of farmers’ associations’ business funds, including credit and supply & marketing businesses. Expenditure business, on the other hand, refers to engaging in farmer education and insurance with the surplusallocatedfrom economic business, containing promotion and insurance businesses. Farmers’ associations aim to serve farmers that the operating earnings of the supply and marketing businesses have been ignored for long. Besides, they are not operated with corporation management and, under the trend of economic and trade liberalization, the government changes the protection policy to open the concessionary business of farmers’ associations step by step that the competition from cooperative markets and agricultural enterprises results in unstable income of the supply and marketing businesses. The credit businesses therefore become the primary capital to support the operation of farmers’ associations. Along with the government’ promotion of financial liberalization, numerous private banks are established in past years. Moreover, farmers’ associations appear problems from internal management to external supervision due to the deficient system that the financial structure of the credit businessesis worsened and the surplus shortage in credit businesses influences the overall operation of farmers’ associations. For this reason, farmers’ associations gradually focus on the supply and marketing businesses which have been ignored for long. The supply and marketing businesses of farmers’ associations in Taiwan cover co-marketing and supply(pesticide, fertilizer distribution, and agricultural products), establishment of agricultural product brands and expansion of the marketing channels, agricultural product processing, and supermarket management. The service offered in the supply and marketing businesses aims at farmers’needs and the supplied agricultural production materials are the necessities for agricultural production. The served objects of the supermarket businesses are expanded to general consumers. As a result, the types of customers contacted and the varieties of products supplied in the supply and marketing businesses are more diversified than other departments in farmers’ associations. The needs for customer relationship management are therefore higher than other departments. Farmers’ associations in Taiwan present the advantage of local service that the supply and marketing business operation should be established based on good customer relationship by more understanding customer needs, analyzing the need information, providing appropriate services and products, and actively concerning about customers’ after-sale responses to adjust and improve the provided services and products. It could dig out new customers, prevent existing customers from loss, and enhance the loyalty and profits. Besides, it could understand current situations and dilemmas of local agriculture production and marketing and provide opportunities and directions for farmers’ associations’ future transformation by analyzing farmers’ relevant information. In this case, the performance evaluation of farmers’ associations introducingcustomer relationship management is discussed in this study. Custos e @gronegócio on line - v. 14, n. 2, Apr/Jun. - 2018. ISSN 1808-2882 www.custoseagronegocioonline.com.br Performance evaluation of basic-level farmers’ associations introducing customer relationship 413 management Hu, R.; Lin, M.; Shieh, C-J. 2. Literature Review 2.1. Customer relationship management Yazdanparast et al. (2016) pointed out the focus on customer relationship management (CRM) since 1999. The product manufacturing and marketing in the past development of agriculture, forestry, fishing, animal husbandry, and manufacturing were product-oriented; nevertheless, the emergence of service and consumerism gradually changed it into customer- oriented. Čeněk et al. (2016) emphasized that customer relationship management, with the assistance of information technology, integrated corporate functions, customer interactive channels, and advanced database technology to search for customer needs and further enhance customer loyalty and satisfaction. Jones et al. (2015) regarded customer relationship management as a tactic that enterprises increased new customers and prevented existing customers from loss, promotedcustomer loyalty, and enhancedcustomers’ profit contribution through meaningful communication and understanding as well as influence on customer behaviors, covering all activities which could change casual customers to loyal customers by satisfying or exceeding the needs to appear repurchase behavior. Griffiths& McLean (2015) defined customer relationship management as continuous relationship marketing, stressed on helping enterprises look for valuable customers for further segmentation, provided different products and channels for the satisfaction, and maintained favorable relationship with customers to further enhance the contribution for the enterprises making profits. Aichner & Jacob (2014) pointed out customer relationship management as business model and strategy application; enterprises grasped customer information by actively deepening the relationship with customers and utilized such customer information for distinct strategy application in order to satisfy different customer needs. Lee, T., Shia& Huh (2016) referred customer relationship as enterprises establishing long-term, mutually satisfactory, and mutually trusted partnership with high commitment, through the combination of economy, technology, information, and society, with the customers. Good customer relationship could be performed by customer satisfaction, customer retention rate, customer turnover, customer loyalty, and customer value. Harrigan & Miles (2014) pointed out customer relationship management as business model and strategy application;enterprises grasped customer information through actively deepening the relationship with customers and utilized such customer information for making distinct strategy application to satisfy